Wheat markets continued the carnage this week as bumper crops in northern Kansas were harvested and moved into the pipeline. Heavy farmer selling pressured cash markets and created additional short hedging from commercial elevators. Wheat futures have lost $2 since the beginning of June.

The corn market was also under heavy pressure throughout the week on ideal growing conditions in the Midwest and sharply lower energy prices. Corn prices have fallen $1.40 since early June.

The soy complex was also sharply lower on massive fund liquidation as the market failed to retest the June highs. The product markets of soymeal and soy oil were also lower as the market sensed more livestock liquidation because of slowing demand and high feed costs, along with lower energy prices suggesting that demand for alternative biofuel was declining. The lower energy markets also weighed on soy prices along with excellent growing weather in the Midwest. The cattle complex was lower on declining boxed beef prices and slowing consumer demand as we head into the heat of summer.

The weakening stock market also cast a shadow over the beef complex as traders began to question the economic recovery and projected declining beef demand.

Feeder cattle followed the live cattle lower but did find some support from stronger cash markets in the Southern Plains’ auction yards. Sharply lower corn prices have also lent support to feeder cattle prices.

Energies were sharply lower led by crude oil as investors increasingly questioned the state of the recovery as the unemployment rate continues to rise and the stock market struggles to hold gains.

The dollar found strength and tested the top end of its trading range as foreign countries’ economies showed signs of sluggish responses to various stimulus efforts and found their currencies under pressure as investors moved back to the safety of the dollar.